[ANN] Bancor | Protocol for Smart-tokens, solving the liquidity problem

[meeekz]

Where is the bounty program for this campaign?

https://www.bancor.network/bounty

[Apostle4444]

What sort of money are people keen to put towards such a Project ?

I can not speak for others but I made a very-very good run on ETH in recent months (over 500%) and Bancor is my next target. I plan on shifting a certain % of that but not more than a thousand ETH.

i would put my bets also to eth

to ETH? i would bet that bancor rises more than ETH atleast short term

Yep I think I'll do the same.. Move some Eth into ICO.

[aguila]

What sort of money are people keen to put towards such a Project ?

I can not speak for others but I made a very-very good run on ETH in recent months (over 500%) and Bancor is my next target. I plan on shifting a certain % of that but not more than a thousand ETH.

i would put my bets also to eth

to ETH? i would bet that bancor rises more than ETH atleast short term

Yep I think I'll do the same.. Move some Eth into ICO.

M2. I am already moving some $ to Eth

[housebtc]

What sort of money are people keen to put towards such a Project ?

I can not speak for others but I made a very-very good run on ETH in recent months (over 500%) and Bancor is my next target. I plan on shifting a certain % of that but not more than a thousand ETH.

i would put my bets also to eth

to ETH? i would bet that bancor rises more than ETH atleast short term

Yep I think I'll do the same.. Move some Eth into ICO.

Yeah, Ethereum ICOs are becoming really successful, but I just have a feeling that we are closing in on a period where ICOs would start dumping when they hit the market just like late last year but we can argue whales are the ones that hijack most of those ICOs

[jacafbiz]

What sort of money are people keen to put towards such a Project ?

I can not speak for others but I made a very-very good run on ETH in recent months (over 500%) and Bancor is my next target. I plan on shifting a certain % of that but not more than a thousand ETH.

i would put my bets also to eth

to ETH? i would bet that bancor rises more than ETH atleast short term

I would love to see Bancor do Ether run or even outperform it, but the value of Ethereum comes from the number of users on the platform, alot of developers are sitting on millions of Ethers locked in their wallets and this reduced the supply on the exchanges and this makes the price to go up. Bancor is not offering anything close to this because the fundamentals are different.

[eyal]

What sort of money are people keen to put towards such a Project ?

I can not speak for others but I made a very-very good run on ETH in recent months (over 500%) and Bancor is my next target. I plan on shifting a certain % of that but not more than a thousand ETH.

i would put my bets also to eth

to ETH? i would bet that bancor rises more than ETH atleast short term

I would love to see Bancor do Ether run or even outperform it, but the value of Ethereum comes from the number of users on the platform, alot of developers are sitting on millions of Ethers locked in their wallets and this reduced the supply on the exchanges and this makes the price to go up. Bancor is not offering anything close to this because the fundamentals are different.

It's important to realize, that since BANCOR price is denominated in ETH, naturally, every increase in the ETH price is translated 1:1 to increase in BANCOR value.

As long as more are buying BANCOR than liquidating it (with/to ETH) through the smart contract -- the price of BANCOR will keep increasing relative to ETH (its baseline).

[eyal]

when tokens are traded on the exchange relative to BTC, understandable pricing mechanism. is the flagship and the others were compared. Here, we propose the creation of crosscourse. Prices will be based on courses that are on the exchanges? If so , then not all tokens are liquid and the prices of some are very different in the exchanges, will average?

The network will only work with tokens which are received by smart contracts on everyone, crosscourse to zec, litecoin, Dash will not be used? what will happen to the tokens of other platforms different from etherium?

If I understand you're question correctly, you're asking how the inevitable price differences between smart tokens internal prices & their prices on exchanges.

The answer is the same as the solution to price differences between exchanges: arbitrage bots. When there is profit to be made by a difference in price, these bots automatically come and make trades until they've evened out the prices (and so it is no longer profitable).

To be clear: smart tokens' contracts can buy/sell themselves. No second party needed. That is how every single currency on the network can be fully liquid from day one.

Yeah, right, but since you are going to run a fractional reserve, actual liquidity is going to limited by initial supply. For example, at 20% reserve ratio change in supply by a factor of 2 in either direction will change the price by a factor of 4. This will limit the amount of tokens we will actually be able to buy or sell at reasonable price. Liquidity would be really infinite in two cases: either the initial supply is very large; or reserve ratio is close to 1.

Actually, the supply can be (and for most smart tokens, we think it will be) much smaller than 20%. The reason that smart tokens can still be liquid with tiny reserves is that, when you buy/sell a smart token (or its reserve tokens) the price is calculated as if you sold an infinitely large amount of micro transactions that equal the same total amount. For every micro transaction you do, the price for the next goes up (as with every supply/demand system). So if supply were to grow smaller, the price of each smart token would decrease proportionally. The token would stay liquid, it would just decrease in value.

If demand were such that the price is no longer 'reasonable' to enough people, demand would go down and said price would stop rising (or fall, if demand went low enough that there are now more people selling than buying). In other words, the price of a smart token is kept reasonable by the market, like any other freely traded commodity.

A price of your token is a power law of its supply relative to initial supply. You need to have a fairly large initial supply if you don't want the price to raise/drop by crazy amount after each trade, unless your reserve ration is close to 1.

This is true, a deeper market depth (which is a main function of a reserve currency in this type of smart token) makes for less volatility. The market depth on any given exchange is usually <1%, so a 20% market depth can be considered quite large.

I am sorry, but you are comparing apples and herrings here.

You can't have 5 BANCOR issued initially, which is reserved by 1 ETH. If you do this, your token will behave as any illiquid token,  a price will be a random number, which varies significantly with every trade of a fraction of ETH. If you run at low reserve ratio, such as 20%, you need to have a huge initial supply, which is much larger than projected daily volume.

The ratio between Token market cap and Reserve have to always stay the same, so by dropping just 1 ETH in 5 to 1 contract you are increasing market cap by 2 and change the price for one Token from 1:1 to 1.74:1 which is the whole 74% price increase, consider that you just dropped a liquidity bomb that changed Token market cap from 5 ETH to 10 ETH, what would have happened to an exchange if you tried to execute order of that magnitude.

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

[Ekkio]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

[sammys]

When frieza say last 5 minute its take 4 hour

[daylox]

Please show us more about threshold and maximum cap.

[john312]

I think the plan was that it won't be capped because the more they collect they more they will have in the reserves. So that decision makes sense, not from the investor's point however.

[whatsTheDeal]

I think the plan was that it won't be capped because the more they collect they more they will have in the reserves. So that decision makes sense, not from the investor's point however.

you do realise that by investor point of view, the more they raise the more our token will rise? for more than 1 reason,
first would be that the token price rises with each token bought from the contract.
second is the fact they will put % of that in the reserve which brings liquidity and that translates to higher volumes.
third they will invest some of that money to build tokens and exchangers that use bancor which will give bancor even more rise in value...
people need to understand that more money != less ROI in this case

[yvv]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

[majestymage]

bancor is making so much noise in the crypto community that it will become a self furfilling prophecy.

[Ekkio]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

[yvv]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

[Ekkio]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

[yvv]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

You "recursive formula" makes a very little sense to me. Expression for bancor price is derived by integrating a differential equation which you pointed out in you first post, dR = PdS. This is not a rocket science, this is a level of homework for undergraduate students of technical schools. It is not possible to explain how calculus works in a forum post, just check any textbook, they explain all theory very well.

[Ekkio]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

You "recursive formula" makes a very little sense to me. Expression for bancor price is derived by integrating a differential equation which you pointed out in you first post, dR = PdS. This is not a rocket science, this is a level of homework for undergraduate students of technical schools. It is not possible to explain how calculus works in a forum post, just check any textbook, they explain all theory very well.

You don't seem to understand the question.

The original formula Price = Reserve / (Supply * CRR) is recursive.

It's calculated in sequential steps , add unit of Reserve, increase Supply according to price, recalculate price, rinse and repeat.

According to you making a continuous formula f(x) out of it is "basic calculus".

If that's that's true then it should be easy for you to make continuous formula out of any recursive formula.

Therefore please make continuous formula out of An+An+1/An+2 = An+3 .

[yvv]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

You "recursive formula" makes a very little sense to me. Expression for bancor price is derived by integrating a differential equation which you pointed out in you first post, dR = PdS. This is not a rocket science, this is a level of homework for undergraduate students of technical schools. It is not possible to explain how calculus works in a forum post, just check any textbook, they explain all theory very well.

You don't seem to understand the question.

The original formula Price = Reserve / (Supply * CRR) is recursive.

It's calculated in sequential steps , add unit of Reserve, increase Supply according to price, recalculate price, rinse and repeat.

According to you making a continuous formula f(x) out of it is "basic calculus".

If that's that's true then it should be easy for you to make continuous formula out of any recursive formula.

Therefore please make continuous formula out of An+An+1/An+2 = An+3 .

You don't need no "recursive formula" to solve this problem. Derivatives and integrals of many analytic functions were derived using the limit theory long before we were born, you just use them when you need. Sorry for being boring, but I'd like to direct you to calculus textbook for undergrads again, where all such derivations are given in details.